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<Research Report>JPM Believes Reviving Homebuyers' Confidence Is More Pivotal to Boost CN Mkt Recovery
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2022/05/16 16:11
The People's Bank of China (PBOC) announced to drop the first-home mortgage rate to 20 bps below the LPR. While believing that said policy will be beneficial in improving the affordability of Chinese properties, JPMorgan highlighted that the property sales in mainland China had remained sluggish despite the fact that the mortgage rate had already been reduced by 50-60 bps since 4Q21.

The broker opined that reviving the confidence of homebuyers is more crucial to propel the recovery of the property market. The investors are yearning for more substantial demand-end policy easing, signs of stabilizing home prices, as well as the removal of pandemic-prevention and control measures, the report added.

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JPMorgan predicted that the share prices of Chinese developers may have positive reactions towards the news but a sustainable rebound will require a more long-term sales recovery. The broker kept CHINA OVERSEAS (00688.HK), CHINA RES LAND (01109.HK) and LONGFOR GROUP (00960.HK) as its sector top picks and preferred CHINA RES MIXC (01209.HK), POLY PPT SER (06049.HK) and CHINA OVS PPT (02669.HK) among the property managers.
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